SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2001
Commission file number 0-16244
VEECO INSTRUMENTS INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2989601 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) Terminal Drive 11803 Plainview, New York (Zip Code) Registrant's telephone number, including area code: (516) 349-8300 ------------------- |
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes |X| No |_|
24,758,916 shares of common stock, $0.01 par value per share, were outstanding as of the close of business on April 27, 2001.
SAFE HARBOR STATEMENT
This Quarterly Report on Form 10-Q (the "Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Discussions containing such forward-looking statements may be found in Items 2 and 3 hereof, as well as within this Report generally. In addition, when used in this Report, the words "believes," "anticipates," "expects," "estimates," "plans," "intends," and similar expressions are intended to identify forward-looking statements. All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results. Factors that may cause these differences include, but are not limited to:
o the dependence on principal customers and the cyclical nature of the data storage, semiconductor and optical telecommunications industries,
o fluctuations in quarterly operating results,
o rapid technological change and risks associated with the acceptance of new products by individual customers and by the marketplace,
o risk of cancellation or rescheduling of orders,
o the highly competitive nature of industries in which the Company operates,
o changes in foreign currency exchange rates, and
o the other matters discussed in the Business Description contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.
Consequently, such forward-looking statements should be regarded solely as the Company's current plans, estimates and beliefs. The Company does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.
VEECO INSTRUMENTS INC.
INDEX PART 1. FINANCIAL INFORMATION Page ---- Item 1. Financial Statements (Unaudited): Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2001 and 2000 4 Condensed Consolidated Balance Sheets - March 31, 2001 and December 31, 2000 5 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2001 and 2000 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosure About Market Risk 15 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 16 SIGNATURES 17 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31, -------- 2001 2000 ---- ---- Net sales $ 127,268 $ 86,831 Cost of sales 67,984 46,463 --------- --------- Gross profit 59,284 40,368 Costs and expenses: Research and development expense 15,716 13,345 Selling, general and administrative expense 21,690 17,128 Amortization expense 1,436 509 Other expense (income), net 1,406 (20) Merger expenses -- 250 --------- --------- Operating income 19,036 9,156 Interest income, net (766) (385) --------- --------- Income before income taxes and cumulative effect of change in accounting principle 19,802 9,541 Income tax provision 6,929 3,593 --------- --------- Net income before cumulative effect of change in accounting principle 12,873 5,948 Cumulative effect of change in accounting principle, net of income taxes -- (18,382) --------- --------- Net income (loss) $ 12,873 $ (12,434) ========= ========= Net income per common share before cumulative effect of change in accounting principle $0.52 0.26 Cumulative effect of change in accounting principle -- (0.80) ----- ------ Net income (loss) per common share $0.52 $(0.54) ===== ====== Diluted net income per common share before cumulative effect of change in accounting principle $0.51 $0.24 Cumulative effect of change in accounting principle -- (0.74) ----- ----- Diluted net income (loss) per common share $0.51 $(0.50) ===== ====== Weighted average shares outstanding 24,678 22,950 Diluted weighted average shares outstanding 25,230 24,747 |
See accompanying notes.
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31, 2001 2000 ---- ---- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 60,854 $ 63,420 Short-term investments 27,293 26,895 Accounts receivable, net 93,161 98,248 Inventories 132,446 100,062 Prepaid expenses and other current assets 10,630 8,307 Deferred income taxes 38,291 45,303 -------- -------- Total current assets 362,675 342,235 Property, plant and equipment at cost, net 61,423 60,094 Excess of cost over net assets acquired, net 13,762 9,481 Other assets, net 10,195 11,473 -------- -------- Total assets $448,055 $423,283 ======== ======== Liabilities and shareholders' equity Current Liabilities: Accounts payable 47,200 33,134 Accrued expenses 68,284 56,093 Deferred gross profit 16,791 28,771 Other current liabilities 2,103 3,774 -------- -------- Total current liabilities 134,378 121,772 Long-term debt, net of current portion 14,169 14,631 Other non-current liabilities 3,865 3,972 Shareholders' equity 295,643 282,908 -------- -------- Total liabilities and shareholders' equity $448,055 $423,283 ======== ======== |
See accompanying notes.
Veeco Instruments Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31, --------- 2001 2000 ---- ---- Operating Activities Net income (loss) $ 12,873 $(12,434) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 4,557 3,461 Deferred income taxes 6,878 3,512 Cumulative effect of change in accounting principle, net of taxes -- 18,382 Stock option income tax benefit 414 3,989 Other, net -- 165 Changes in operating assets and liabilities: Accounts receivable 2,353 (11,258) Inventories (33,396) (10,060) Accounts payable 14,190 4,722 Accrued expenses, deferred gross profit and other current liabilities (3,573) (22,411) Other, net (2,243) (95) Operating activities three months ended 12/31/99 - CVC -- 638 -------- -------- Net cash provided by (used in) operating activities 2,053 (21,389) Investing activities Capital expenditures (4,455) (5,450) Proceeds from sale of leak detection business -- 3,000 Payment for net assets of businesses acquired (1,791) (7,177) Net purchases of short-term investments (391) (619) Investing activities three months ended 12/31/99 - CVC -- (528) -------- -------- Net cash used in investing activities (6,637) (10,774) Financing activities Proceeds from stock issuances 272 6,031 Repayments of long-term debt, net (507) (4,480) Proceeds from borrowings under line of credit -- 10,000 Financing activities three months ended 12/31/99 - CVC -- 3,627 -------- -------- Net cash (used in) provided by financing activities (235) 15,178 Effect of exchange rates on cash and cash equivalents 2,253 653 -------- -------- Net change in cash and cash equivalents (2,566) (16,332) Cash and cash equivalents at beginning of period 63,420 29,852 -------- -------- Cash and cash equivalents at end of period $ 60,854 $ 13,520 ======== ======== |
See accompanying notes.
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.
Earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of common and common equivalent shares outstanding during the period.
The following table sets forth the reconciliation of diluted weighted average shares outstanding:
Three Months Ended March 31, --------- (In thousands) 2001 2000 ---- ---- Weighted average shares outstanding 24,678 22,950 Dilutive effect of stock options 552 1,797 ------ ------ Diluted weighted average shares outstanding 25,230 24,747 ====== ====== |
Note 2 - Balance Sheet Information
Short-term Investments
The carrying amounts of available-for-sale securities approximate fair value. The following is a summary of available-for-sale securities:
March 31, December 31, 2001 2000 ---- ---- (In thousands) Commercial paper $14,362 $15,730 Municipal bonds -- 2,707 Obligations of U.S. Government agencies 10,852 4,404 Other debt securities 2,079 4,054 ------- ------- $27,293 $26,895 ======= ======= |
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
Note 2 - Balance Sheet Information (cont'd)
All investments at March 31, 2001 have contractual maturities of one year or less. During the three months ended March 31, 2001, available-for-sale securities with fair values at the date of sale of approximately $25.5 million were sold.
Inventories
Interim inventories have been determined by lower of cost (principally first-in, first-out) or market. Inventories consist of:
March 31, December 31, 2001 2000 ---- ---- (In thousands) Raw materials $ 65,240 $ 60,281 Work-in-progress 40,051 23,703 Finished goods 27,155 16,078 -------- -------- $132,446 $100,062 ======== ======== Other Balance Sheet Information March 31, December 31, 2001 2000 ---- ---- (In thousands) Allowance for doubtful accounts $ 2,198 $ 2,116 Accumulated depreciation and amortization of property, plant and equipment $ 41,904 $ 38,801 |
VEECO INSTRUMENTS INC. AND SUBSIDIARIES
Note 3 - Segment Information
The following represents the reportable product segments of the Company as of and for the three months ended March 31, 2001 and 2000, in thousands:
Operating Income Net Sales (Loss) Total Assets 2001 2000 2001 2000 2001 2000 ------------------------------------------------------------------ Process Equipment $ 80,297 $ 55,175 $ 16,203 $ 6,636 $180,653 $163,025 Metrology 45,087 28,932 6,626 4,094 106,441 89,179 Industrial Measurement 1,884 2,724 (576) (398) 8,053 11,815 Unallocated Corporate amount -- -- (3,217) (1,176) 152,908 103,008 -------- -------- -------- -------- -------- -------- Total $127,268 $ 86,831 $ 19,036 $ 9,156 $448,055 $367,027 ======== ======== ======== ======== ======== ======== |
Note 4 - Comprehensive Income (Loss)
Total comprehensive income (loss) was $12.0 million and $(12.8) million for the three months ended March 31, 2001 and 2000, respectively. Other comprehensive income is comprised of foreign currency translation adjustments, minimum pension liability and net unrealized holding gains and losses on available-for-sale securities.
Note 5 - Recent Events
On April 19, 2001, the Company entered into a new revolving credit facility (the "New Facility"), which replaces the Company's prior $40 million revolving credit facility. The New Facility provides the Company with up to $100 million of availability. The New Facility's interest rate is the prime rate of the lending banks, however is adjustable to a maximum rate of 1/4% above the prime rate in the event the Company's ratio of debt to cash flow exceeds a defined ratio. A LIBOR based interest rate option is also provided. The New Facility has a term of four years and borrowings under the new facility may be used for general corporate purposes, including working capital and acquisitions. The New Facility contains certain restrictive covenants, which among other things, impose limitations with respect to incurrence of indebtedness, limitation on the payment of dividends, long-term leases, investments, mergers, consolidations and sales of assets. The Company is also required to satisfy certain financial tests. As of March 31, 2001, no borrowings were outstanding under the Company's prior credit facility.
Note 5 - Recent Events (cont'd)
On January 1, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities -- An Amendment of FASB Statement No. 133." SFAS No. 133 requires that all derivatives, including foreign currency exchange contracts, be recognized on the balance sheet at fair value, which is recorded through earnings. If a derivative is a qualifying hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the underlying assets or liabilities through earnings or recognized in accumulated comprehensive income until the underlying hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is to be immediately recognized in earnings.
During the three months ended March 31, 2001, the Company began using derivative financial instruments to minimize the impact of foreign exchange rate changes on earnings and cash flows. In the normal course of business, operations are exposed to fluctuations in foreign exchange rates. In order to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactions and other known foreign currency exposures, the Company enters into monthly forward contracts (which during the three months ended March 31, 2001 were all for the Company's Japanese subsidiary). The Company does not use derivative financial instruments for trading or speculative purposes. The Company's forward contracts do not subject it to material risks due to the exchange rate movements because gains and losses on these contracts offset exchange gains and losses on the underlying assets and liabilities; both the forward contracts and the underlying assets and liabilities are marked-to-market through earnings. For the three months ended March 31, 2001, approximately $929,000 of realized gains on forward exchange contracts were recorded and included in other expense (income), net. As of March 31, 2001, approximately $1.1 million of gains related to forward contracts are included in prepaid expenses and other current assets and have been subsequently received in April 2001. As of March 31, 2001, there were no open forward contracts.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations.
Three Months Ended March 31, 2001 and 2000
Net sales of $127.3 million for the three months ended March 31, 2001 represents an increase of 47% from the 2000 comparable period sales of $86.8 million, reflecting an increase in both process equipment and metrology sales. Sales in the U.S., Europe, Japan and Asia Pacific, accounted for 59%, 12%, 20% and 8%, respectively, of the Company's net sales for the three months ended March 31, 2001. Sales in the U.S. increased 100% from the comparable 2000 period due to a 115% increase in U.S. process equipment sales and an 83% increase in U.S. metrology sales. U.S. process equipment sales increased due to a 592% increase in optical telecommunications sales for Veeco's Ion Tech subsidiary. The increase in U.S. metrology sales is due primarily to a 75% increase in atomic force microscope (AFM) sales. Sales in Europe increased by 27%, while sales in Japan and Asia Pacific remained relatively flat from the 2000 comparable period. The increase in Europe is due to increases in both process equipment and metrology sales. The Company believes that there will continue to be quarter-to-quarter variations in the geographic concentration of sales.
Process equipment sales of $80.3 million for the three months ended March 31, 2001 represent an increase of $25.1 million, or 46%, from the comparable 2000 period, due primarily to increased sales to the optical telecommunications industry, partially offset by decreased sales to the data storage industry. Metrology sales of $45.1 million for the three months ended March 31, 2001 increased by $16.2 million, or 56% over the comparable 2000 period due primarily to increases in the sales of AFMs.
Veeco received $112.9 million of orders during the three months ended March 31, 2001, a 2% increase compared to $111.2 million of orders for the comparable 2000 period. Process equipment orders increased 20% to $72.9 million, principally reflecting an increase in orders from the optical telecommunications industry, as well as an increase in orders for ion beam deposition systems by data storage customers. Metrology orders decreased by 21% to $37.3 million, reflecting a decrease in bookings for the Company's optical metrology line of products. The book/bill ratio for the first quarter of 2001 was 0.89.
Gross profit for the three months ended March 31, 2001 of $59.3 million represents an increase of $18.9 million from the comparable 2000 period. Gross profit as a percentage of net sales remained relatively consistent at 46.6% and 46.5% for the three months ended March 31, 2001 and 2000, respectively. The slight increase is due to favorable volume impact in 2001 partially offset by a mix difference, particularly in AFM, which had a favorable mix in the first quarter 2000.
Research and development expenses of $15.7 million for the three months ended March 31, 2001 increased by $2.4 million, or 18%, over the comparable period of 2000. The increase principally relates to increased investment in both the Ion Tech and the AFM product lines.
Selling, general and administrative expenses of $21.7 million for the three months ended March 31, 2001 increased by approximately $4.6 million or 27% over the comparable 2000 period. The increase is due to increased selling and commission expense related to higher sales volume and to new operating management and information technology infrastructure required for business growth. As a percentage of sales, selling, general and administrative expenses decreased to 17.0% of net sales in 2001 from 19.7% in 2000.
Income taxes for the three months ended March 31, 2001 amounted to $6.9 million, or 35%, of income before income taxes, as compared to $3.6 million, or 38%, of income before income taxes, for the same period of 2000.
Effective January 1, 2000, the Company changed its method of accounting for revenue recognition in accordance with Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. The cumulative effect of this change on prior years resulted in a charge to income of $18.4 million (net of income taxes of $12.6 million) which is included in the Consolidated Statement of Operations for the three months ended March 31, 2000. For the three months ended March 31, 2000, the Company recognized approximately $37.7 million in revenue that was included in the cumulative effect adjustment as of January 1, 2000. The effect of that revenue in the first quarter of 2000 was to increase income by $10.9 million (after reduction for income taxes of $7.4 million) during that period.
Quarterly information for the three months ended March 31, 2000 has been restated from that previously filed on the Quarterly Report on Form 10Q due to the adoption of SAB 101. In addition, the restatement for the quarter ended March 31, 2000 also includes the effects of the merger with CVC in May 2000. The adoption of SAB 101 and the merger with CVC had the effect of increasing net sales by $35.4 million for the first quarter of 2000. Net income for the first quarter of 2000 decreased by $14.8 million, and basic and diluted earnings per share decreased by $0.67 and $0.63, respectively.
Liquidity and Capital Resources
Net cash provided by operations totaled $2.1 million for the three months ended March 31, 2001 compared to cash used in operations of $21.4 million for the comparable 2000 period. Cash provided by operations in 2001 includes adjustments to reconcile net income to net cash provided principally from net income plus non-cash charges for depreciation and amortization, deferred income taxes and a stock option income tax benefit aggregating $24.7 million, plus an increase in accounts payable of $14.2 million and a decrease in accounts receivable of $2.4 million. These items were partially offset by the decrease in accrued expenses, deferred gross profit and other current liabilities of $3.6 million and the increase in inventories of $33.4 million during the three months ended March 31, 2001. The increase in accounts payable is due to increased inventory purchases. The decrease in accrued expenses, deferred gross profit and other current liabilities is due primarily to a decrease in deferred revenue relating to the impact of SAB
101 along with the payment of income taxes partially offset by an increase in customer deposits. Inventories increased by $33.4 million due primarily to new product production ramp and rescheduled shipments and delay in title passage and acceptance of tools at the Company's international operations. Net cash used in operations for the three months ended March 31, 2000 included operating activities for the three months ended December 31, 1999 related to CVC. Prior to the merger, CVC's fiscal year end was September 30.
Net cash used in investing activities for the three months ended March 31, 2001 totaled $6.6 million compared to $10.8 million for the comparable 2000 period. Cash used in 2001 consisted of $4.5 million of capital expenditures. The Company also expended approximately $1.8 million in contingent consideration based on year 2000 sales, which was paid to the former shareholders of OptiMag. Included in the net cash used in investing activities for the three months ended March 31, 2000 is investing activities for the three months ended December 31, 1999 related to CVC.
Net cash used in financing activities for the three months ended March 31, 2001 totaled $0.2 million, compared to cash provided by financing activities of $15.2 million for the comparable 2000 period. Cash used in financing activities in 2001 consisted of proceeds of $0.3 million from stock issuances upon exercise of stock options, offset by $0.5 million of debt repayments. Net cash provided by financing activities for the three months ended March 31, 2000 included financing activities for the three months ended December 31, 1999 related to CVC.
On April 19, 2001, the Company entered into a new revolving credit facility (the "New Facility"), which replaces the Company's prior $40 million revolving credit facility. The New Facility provides the Company with up to $100 million of availability. The New Facility's interest rate is the prime rate of the lending banks, however is adjustable to a maximum rate of 1/4% above the prime rate in the event the Company's ratio of debt to cash flow exceeds a defined ratio. A LIBOR based interest rate option is also provided. The New Facility has a term of four years and borrowings under the new facility may be used for general corporate purposes, including working capital and acquisitions. The New Facility contains certain restrictive covenants, which among other things, impose limitations with respect to incurrence of indebtedness, limitation on the payment of dividends, long-term leases, investments, mergers, consolidations and sales of assets. The Company is also required to satisfy certain financial tests. As of March 31, 2001, no borrowings were outstanding under the Company's prior credit facility.
In connection with the atomic force microscope acquisition in March 2000, the Company is required to pay approximately $1.2 million of the purchase price to the seller, due and paid in April, 2001.
In connection with the OptiMag acquisition in October 1999, the Company is required to pay additional consideration to the former shareholders of OptiMag based upon the appraised value of OptiMag. During the three months ended March 31, 2001, approximately $4.5 million of contingent consideration relating to the appraised value of OptiMag was accrued and recorded as an addition to excess of cost over net assets acquired. This contingent consideration was paid in April 2001.
The Company believes that existing cash balances together with cash generated from operations and amounts available under the New Facility will be sufficient to meet the Company's projected working capital and other cash flow requirements for the next twelve months.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Veeco's investment portfolio consists of cash equivalents, commercial paper and obligations of U.S. Government agencies. These investments are considered available-for-sale securities; accordingly, the carrying amounts approximate fair value. Assuming March 31, 2001 variable debt and investment levels, a one-point change in interest rates would not have a material impact on net interest expense. Veeco's net sales to foreign customers represented approximately 41% of Veeco's total net sales for the three months ended March 31, 2001 and 57% for the comparable 2000 period. The Company expects that net sales to foreign customers will continue to represent a large percentage of Veeco's total net sales. Veeco's net sales denominated in foreign currencies represented approximately 15% of Veeco's total net sales for the three months ended March 31, 2001 and 10% for the comparable 2000 period. The aggregate foreign currency exchange loss included in determining consolidated results of operations was $1,461,000, net of $929,000 of realized gains on forward exchange contracts, for the three months ended March 31, 2001 and was not material during the three months ended March 31, 2000. The change in currency exchange rate that has the largest impact on translating Veeco's international operating profit is the Japanese yen. The Company estimates that a 10% change in foreign currency exchange rates would impact reported operating profit for the three months ended March 31, 2001 by approximately $2.8 million. The Company believes that this quantitative measure has inherent limitations because it does not take into account any governmental actions or changes in either customer purchasing patterns or financing and operating strategies. Veeco is exposed to financial market risks, including changes in foreign currency exchange rates. To mitigate these risks, commencing in the three months ended March 31, 2001 the Company began using derivative financial instruments. Veeco does not use derivative financial instruments for speculative or trading purposes. The Company enters into monthly forward contracts to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactions and other known currency exposures. The average notional amount of such contracts was approximately $18.0 million for the three months ended March 31, 2001. For the three months ended March 31, 2001, all forward contracts were for the Company's Japanese subsidiary.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Unless otherwise indicated, each of the following exhibits has been previously filed with the Securities and Exchange Commission by the Company under File No. 0-16244.
Incorporated by Reference Number Exhibit to the Following Documents ------ ------- -------------------------- 3.1 Certificate of Designation, Preferences * and Rights setting forth the terms of the Series A Junior Participating Preferred Stock of Veeco Instruments Inc. dated March 14, 2001 3.2 Certificate of Change of Location of * Registered Office and of Registered Agent of Veeco Instruments Inc. dated March 15, 2001. 4.1 Rights Agreement, dated as of March 13, Registration Statement on 2001, between Veeco Instruments Inc. and Form 8-A dated March 15, American Stock Transfer and Trust Company, 2001, Exhibit 1 as Rights Agent, including the form of the Certificate of Designation, Preferences and Rights setting forth the terms of the Series A Junior Participating Preferred Stock, par value $0.01 per share, as Exhibit A, the form of Rights Certificates as Exhibit B and the Summary of Rights to Purchase Preferred Stock as Exhibit C. |
*Filed herewith
(b) Reports on Form 8-K.
The Registrant filed a Current Report on Form 8-K on March 15, 2001 regarding the adoption of a shareholder rights plan.
The Registrant filed a Current Report on Form 8-K on February 16, 2001 reporting quarterly financial information for the year ended December 31, 2000 which results have been restated to give effect to the adoption of SAB 101 (the "Form 8K"). The Registrant filed an Amendment on Form 8-K/A to the Form 8-K on March 12, 2001, reporting a change to certain information included in the Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: May 9, 2001
Veeco Instruments Inc.
By: /s/ Edward H. Braun --------------------------------- Edward H. Braun Chairman, Chief Executive Officer and President By: /s/ John F. Rein, Jr. --------------------------------- John F. Rein, Jr. Executive Vice President, Chief Financial Officer and Secretary |
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
VEECO INSTRUMENTS INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
We, Edward H. Braun, Chairman of the Board and Chief Executive Officer, and John F. Rein, Jr., Executive Vice President, Chief Financial Officer, Treasurer and Secretary, of Veeco Instruments Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors on March 13, 2001, adopted the following resolution creating a series of 30,000 shares of Preferred Stock designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall be 30,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to the provision for adjustment hereinafter set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $0.01 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after March 13, 2001 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in Paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to
six (6) quarterly divi dends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "de fault period")
which shall extend until such time when all accrued and unpaid dividends
for all previous quar terly dividend periods and for the current quarterly
dividend period on all shares of Series A Junior Participating Preferred
Stock then outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred Stock
(including holders of the Series A Junior Par ticipating Preferred Stock)
with dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective of series, shall have
the right to elect two (2) directors.
(ii) During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that
neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain cases, the authorized number of directors shall be exercised unless the hold ers of ten percent (10%) in number of shares of Pre ferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such right is exercised at an annual meeting, to elect two (2) direc tors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of the Pre ferred Stock shall have exercised their right to elect directors in any default period and during the continu ance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing default period, have previ ously exercised their right to elect directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall there upon be called by the President, a Vice-President or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock out standing. Notwithstanding the provisions of this Para graph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Cor poration if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of
Preferred Stock shall have exercised their right to elect two (2)
directors voting as a class, after the exercise of which right (x) the
directors so elected by the holders of Preferred Stock shall contin ue in
office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the
Board of Directors may (except as provided in Paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which elected the
direc tor whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the hold ers of a particular class
of stock shall include direc tors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a
default period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any directors
elected by the holders of Preferred Stock as a class shall terminate, and
(z) the number of directors shall be such number as may be provided for in
the certificate of incorporation or by- laws irrespective of any increase
made pursuant to the provisions of Paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner
provided by law or in the certificate of incorporation or by-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining directors.
(D) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or other wise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liqui dation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liqui dation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or other wise acquire shares of any such parity stock in ex change for shares of any stock of the Corporation ranking junior (either as to dividends or upon disso lution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A Junior Partic ipating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Pre ferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount equal to $10,000 per share of Series A
Participating Preferred Stock, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 10,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a
per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by mul tiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of Series A Junior Participating Preferred Stock are outstanding, neither the Restated Certificate of Incorporation of the Corpo ration nor this Certificate of Designation shall be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 14th day of March, 2001.
/s/ Edward H. Braun ---------------------------------------- Chairman of the Board and Chief Executive Officer Attest: /s/ John F. Rein, Jr. ----------------------------- Secretary |
EXHIBIT 3.2
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
OF
VEECO INSTRUMENTS INC.
It is hereby certified that:
1. The name of the corporation is:
VEECO INSTRUMENTS INC.
2. The registered office of the corporation within the State of Delaware is hereby changed to 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle.
3. The registered agent of the corporation within the State of Delaware is hereby changed to Corporation Service Company, the business office of which is identical with the registered office of the corporation as hereby changed.
The corporation has authorized the changes hereinbefore set forth by resolution of its Board of Directors.
Signed on February 28, 2001
/s/ Gregory A. Robbins ---------------------------------------- Name: Gregory A. Robbins Title: V.P. and General Counsel |